The Ministry of Trade, Industry, and Cooperatives has ordered CN Sugar Ltd to shut down, accusing the company of failing to establish a nucleus estate of at least 500 hectares before setting up its factory.
In a letter dated June 17, Trade Minister Francis Mwebesa highlighted that CN Sugar Ltd only established 121 hectares before proceeding with the mill’s construction.
“Reference is made to your application to establish a sugar mill in Namayingo dated September 30, 2022, and a no-objection letter was issued to you on November 9, 2022, with a condition that you establish a nucleus estate of about 500 hectares,” the letter stated. “But during the verification exercise, it was discovered that only 121 hectares were established.”
As a result, Minister Mwebesa announced the revocation of the company’s certificate to set up the factory. “I advise you to identify alternative land in an area outside Busoga Sub-region where you can acquire substantial land to establish a nucleus estate, and any inconveniences caused are highly regretted,” the letter further reads.
However, CN Sugar Ltd manager Rashid Kakungulu contested the directive, asserting that the company had complied with the government’s requirements. “We have bought 1,300 acres because they told us to buy land yet they only need 1,250 acres. At the site, we have 300 acres of sugarcane, and in the field, we have planted sugarcane on about 650 acres,” he said.
Mr. Kakungulu urged the government to consider the investment already made in the factory. “We have not yet erected the machines, but the construction of the factory is 40 percent complete with $6 million invested so far. Unless the government compensates the investors with $15 million, we vow not to leave the area,” he stated. He also mentioned that the minister had previously authorized the construction of stores, staff quarters, perimeter walls, and a canteen.
Namayingo District Chairperson Ronald Sanya expressed concern over the closure, stating that they would petition President Museveni to intervene, as CN Sugar Ltd is the only industry constructed in Namayingo since its inception. Vice Chairperson Abdallah Twaha Kawuta noted that the factory was expected to generate revenue through taxes, which would improve service delivery in the area.
Residents, including Mark Simunyu from Kifuyo Village, Buyinja Sub-county, have asked the Trade Ministry for compensation, citing that some had sold graveyards to facilitate the factory’s establishment. The General Secretary of Busoga Sugarcane Outgrowers Association, David Christopher Mombwe, criticized the government’s decision, saying, “Instead of addressing the fluctuating price of sugarcane, they are closing the few factories in Busoga, which have created jobs in the area.”
